Why You Should Save Up Before Selling Your Home

concept of selling home on wooden background close up

Before selling your home, you should save up some extra money, because your total cost will be more than the sale price. Selling a home has many costs associated with it which you need to be prepared for. You should save up so you can pay for closing costs, moving costs, and real estate commission fees.

Pay for Closing Costs

When buying or selling a home, you will have closing costs. You can expect to pay 8-10% of the sale price in closing costs. Closing costs can include taxes, fees for settlement, and other fees like commissions. There is not a set price for closing costs because they can vary. The state where you live and your local area can affect the tax rates. Other factors are determined by homeowners’ associations, purchase agreements between you and the buyer, and the services required in your area.

Moving Costs

In addition to the costs of the sale of your home, it will cost you money to move your belongings to your new home. You may need to rent a truck and pay for fuel. Moving during an off-season is generally less expensive. This is because there is less demand for transportation and services to help you move. In addition to transportation, you may also need to pay for repairs, maintenance, and professional cleaning.

Real Estate Commission Fees

Selling your home with a real estate agent can help you sell your home. They have the experience and the networks to help your home be seen by potential buyers. They can add your home to the MLS and schedule showings of your home. This helps to save you time and can also help your home get sold faster. While there are many benefits of having an agent, they will cost you some money in commission fees. If your buyer is using an agent too, the fees will be split between your agent and the buyer’s agent. You should expect total commissions to be about 5-6% of the sale price of the home. These commissions are included as part of the closing costs for your home.

Because there are more costs associated with your home sale, you need to save up so you can be prepared. Be prepared for 10% of the sale price and expenses associated with moving. When you save money before you sell you will have a greater cushion on your finances.

Check out this article on basic steps that will lay the foundation for financial independence!